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Committee adopts 10% fund‑balance minimum and 5% budget cushion; staff to propose allocation plan
Summary
Ways & Means adopted a policy framework setting a 10% unrestricted general‑fund balance minimum and a 5% budgetary consideration to guide the FY27 budget; staff will propose how any excess is allocated — including additional payments toward MERS unfunded liabilities.
Eaton County’s Ways & Means Committee on April 15 adopted a fund‑balance target framework: a minimum unrestricted general‑fund balance equal to 10% of prior‑year expenses, plus an additional 5% budgetary consideration to allow fiscal flexibility during budget development.
County staff explained the approach is intended to preserve a floor for contingencies while allowing the board to deliberate how marginal excess funds should be used — most notably to accelerate payments toward the county’s MERS (Michigan Employees’ Retirement System) unfunded liability and retiree‑health obligations. Ben told the committee the county’s unaudited unrestricted fund balance was about $9.81 million and that adopting the 10% floor (with the 5% consideration) gives officials a clear rule of thumb for the FY27 budget.
Why it matters: the policy formalizes a minimum reserve to protect county services from revenue shocks and provides a structured way to direct any available excess toward legacy liabilities or one‑time investments. Committee members discussed maintaining flexibility for capital or unanticipated repairs while prioritizing reduced long‑term pension/retiree costs.
The committee adopted the framework and directed staff to return with a detailed fund‑balance policy and specific allocation recommendations (for example, a proposed immediate transfer of a portion of excess funds into MERS and a recommendation for any remaining portion). The policy will be used during the FY27 budget process.
What’s next: staff will draft a full fund‑balance policy and recommended allocations (including proposed MERS contributions) for Ways & Means review before final budget adoption.
